An English translation of this self-explanatory note is duly enclosed for
the Department’s information.
[Enclosure—Translation]
The Ecuadoran Minister for Foreign Affairs
(Tobar
Donoso) to the American
Minister (Long)
No. 61 DC
Quito, May 18,
1939.
Mr. Minister: The very courteous note No.
45 of the eighth instant from Your Excellency,34 regarding the fulfilment of the
Legislative Decree of March 3rd last, which regulates the
computation of the commercial balance, in dealing with the
exportations of crude petroleum, mineral earth, and gold in bars;
and the effects which such regulations might have upon the Trade
Agreement signed between Ecuador and the United States of America,
was immediately brought to the attention of the Minister of Finance
and of the Central Bank, with the recommendation that it be studied
prior to any other administrative question.
In conformity with the request of the Foreign Office, the President
of the said banking institution, gave me the following reply which I
quote:
“Central Bank of Ecuador, Quito, May 16, 1939, No. 3792.
“Dr. Julio Tobar Donoso, Minister for Foreign Affairs,
City.
“I have the pleasure of making immediate reply to your
courteous note of that Ministry, numbered Mb. 334–DC and
dated the fifteenth instant, with which you enclosed the
communication from the Minister of the United States of
North America to your Ministry, regarding the fulfilment of
the Legislative Decree of March 3rd last, concerning the
manner of computing the trade balance of the exportations of
crude petroleum, mineral earth and gold in bars, and its
relation to the Trade Agreement signed between Ecuador and
the United States of North America on August 6, 1938. The
Ministry under your worthy charge was good enough to quote
the said note and to request me to advise you thereon as
soon as possible. I can give you my opinion as follows: The
above-mentioned Legislative Decree was issued by the last
Extraordinary Congress, being based on the fact that, as
regards Ecuadorean economy; the exportation of mineral earth
and petroleum represents, in reality, a supply of foreign
exchange to the country only in the proportion set forth in
the said Decree, and I understand that it was the Ministry
of Foreign Affairs which promoted the enactment of the
Decree in question, for the reasons mentioned. Consequently,
the Ministry of Foreign Affairs should maintain, in my
opinion, the same reasons in reply to the note of the
Minister of the United States. The Legislative Decree of
[Page 620]
March 3rd last,
does not refer expressly to the exportations from Ecuador to
the United States, as one might assume from the note of the
Minister of that country, but to petroleum, mineral earth,
and gold, destined to any country, without any complaint
having been received, as far as I know, from any country.
While it is certain that, in making the deductions provided
for in the Law in question, the figures of exports to the
United States may be reduced to the point where it appears
that (Ecuador) has an unfavorable trade balance with that
country, this situation in perspective has no way changed
the preference which the Import Control, under this Bank,
observes with respect to the heavy purchases which,
generally, are made from the United States, a country
heading sales to Ecuador.
Very truly yours,
N. Bonifaz”.
As Your Excellency may confirm, the purpose which inspired the
Legislative Decree of March 3rd of this year, is essentially
economic and is not concerned with special means of appreciating the
various markets which supply themselves with Ecuadorean production.
Thus, the provisions constituting the same, do not exclusively or
partially affect certain countries, except that their application,
of a uniform, general, and absolutely impartial character, creates
unfavorable projections in the volume of the trade balance, for all
those nations which buy from us products of mineral origin that are
set forth in the Decree in question.
Moreover, as the President of the Central Bank well says, the
operation of the said Decree has not prevented the normal commercial
development between my country and that so worthily represented by
Your Excellency; nor has it created any obstacles to the free and
favorable issuance of permits for the importation of merchandise
from the United States of America.
I avail myself [etc.]
